August 22, 2011 / 20:03 IST
Suggesting strong measures to track black money, accounting regulator ICAI today said new foreign banks should be granted licences only if they agree to furnish details on "investment made by Indian people outside India".
Apart from this, the Institute of Chartered Accountants of India (ICAI) also pitched for making it compulsory for revealing the source of funds of foreign donations coming into India to prevent money laundering.
The ICAI has constituted a group to provide necessary inputs on addressing the issue of black money, 'benami' transactions and money laundering and it is expecting to submit recommendations to the Central Board of Direct Taxes by September or October.
"If any foreign bank comes to India we should get a declaration (from it) that any investment made by Indian people outside India, they (bank) have to provide details about it and they have to agree for it if they want a licence (to operate in India)," ICAI President G Ramaswamy told reporters on the sidelines of annual convocation.
Stating that ICAI is working how banking sector could respond to the grave problem of black money, he said information which is in the interest of nation must be shared by the foreign financial institutions with Indian authorities.
The accounting regulator is also of the view that access should be allowed to know about the source of funds of any donation flowing from abroad into India.
"We must have right to collect information about who is giving money (donation) ... how this money is utilised ... if not then why it is not utilised. The main idea is that the foreign donation should not act as a case of money laundering," he stressed.
Ramaswamy further said, "We are requesting that trusts which receive foreign donations should get registered with the Ministry of Home Affairs and they should file details about their accounts in order to bring transparency in their functioning."
ICAI has already submitted a report on 'Uniform Accounting and Auditing Framework' for political parties to the Election Commission, having a mandate of bringing about accountability of political parties by amending relevant laws.
Asked about the status of Rs 14,000-crore Satyam fraud, ICAI President said that it had already cross examined 12 witnesses, including banks, CBI and SEBI, in this case.
He informed that one of the auditors had gone to the Supreme Court to stay proceedings but their SLP was rejected.
"Now they have been asked to present before our disciplinary committee after October 3," he said.
ICAI had constituted a five member disciplinary committee to carry out proceedings against auditors of Satyam Computer.
Earlier in his speech, Ramaswamy asked Chartered Accounts to maintain corruption free system while playing a role of auditors, tax consultants and liquidators.
